Loom manufacturer Picanol not curbed by crisis

Even though they suffered a setback during the first half of the year, looming manufacturer Picanol said in Ieper yesterday to be ‘satisfied’ with their performance. It could have been worse, so they have reason to be happy. Especially if one considers how much worse their Japanese competitors, Toyota and Tsudokama, have suffered. Their advantage over Japanese rivals to win customers is not only due to the favourable euro exchange rate. “We are the only manufacturer to have launched new machines on the market last year,” Picanol CEO and owner Luc Tack confirmed during the press conference yesterday. “The rest are all cutting their costs to the bone. Admittedly that makes us an expensive manufacturer in a time of crisis. But it’s because we continue to invest.” Their figures prove his point, as the company continued to receive new orders during the second quarter despite the weak market; Picanol even had to recruit 50 temporary workers to process their orders. Keeping a close eye on the Picanol share price, a satisfied Guy Sips, market analyst for KBC Securities, has even increased its price target to prove this confidence. The impact of Tack’s management on the company is undeniable. In 2009 Tack saved the loom manufacturer with fresh funds and a serious reorganization. To protect the company against the dangers of a financial crisis, Picanol built up a solid financial buffer, increasing its cash position to about 139 million and its proper capital to 189 million euros at the end of June. Tack aims at technological progress as well. “We are more expensive than our competitors, but we are better. And we continue to improve.” During yesterday’s presentation he proudly announced the group’s investments in a new head office in India and a new distribution centre at the Picanol factory in the Chinese city of Suzhou. The new machines they launched last year are more efficient and yield a higher percentage of top-rank products. But they are also capable of producing top quality products with mediocre raw materials, which is a huge advantage for textile manufacturers faced with more cautious customer spending. According to Tack, the current economic condition calls for efficiency and sustainability, i.e. top quality technology. And Picanol’s performance is proof of that philosophy if one compares their increasing market share with that of their competitors. Tack has also invested in  the manufacturing of machine components and testing in its subsidiary, Proferro  and in the design of electronic and mechatronic systems at PsiControl Mechatronics for other machine manufacturers such as Atlas Copco or Transics fleet management solutions and Traficon traffic management systems. During the first half of the year, PsiControl and Proferro both managed to limit the drop in turnover to 8% despite lower loom sales. Tack is not prepared to make any predictions in the short or medium term, but remains upbeat about long-term prospects.